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Income Taxes | 9 Months Ended
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Feb. 24, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes On December 22, 2017, the U.S. Government enacted the reconciled tax reform bill, commonly known as the Tax Cuts and Jobs Act of 2017 (the “TCJA”). The TCJA makes broad changes to the U.S. tax code including, but not limited to, reducing the Company’s federal statutory tax rate from 35%, to an average rate of 29.4% for the fiscal year ended May 27, 2018, and then 21% for the three and nine months ended February 24, 2019 and thereafter; requiring companies to pay a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries; generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries; requiring a current inclusion in U.S. federal taxable income of certain earnings of controlled foreign corporations' creating a global intangibles low-taxed income inclusion and the base erosion anti-abuse tax, a new minimum tax. The TCJA also enhances and extends through 2026 the option to claim accelerated depreciation deductions on qualified property, however, the domestic manufacturing deduction, from which the Company has historically benefited, has been eliminated. In March 2018, FASB issued Accounting Standards Update No. 2018-5, Income Taxes Topic (740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118, ("ASU 2018-5") to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. The Company's accounting for the Tax Act was incomplete as of May 27, 2018. The Company’s analysis for the Transition Tax and the re-measurement of deferred taxes due to the Tax Rate Reduction has been completed and the Company does not expect its analysis to substantially change from its current result. For the nine months ended February 24, 2019, the cumulative adjustment recorded to reflect changes in the original estimates was an additional tax expense o f $347,000. Ongoing guidance and accounting interpretation for the Tax Act are expected over the coming months and years and the Company will consider any changes in the accounting of the TCJA in the period in which such additional guidance is issued. The provision for income taxes for the nine months ended February 24, 2019 was an expense of $584,000. The effective tax rate for the nine months ended February 24, 2019 was 46%. The effective tax rate for the nine months ended February 24, 2019 was higher than the statutory federal income tax rate of 21%, primarily due to the completion of the Company’s analysis for TCJA. This increase was partially offset by state taxes, stock-based compensation, and the generation of federal & state R&D Credits. The provision for income taxes for the nine months ended February 25, 2018 was a benefit of $11.4 million. The Company’s effective tax rate for the nine months ended February 25, 2018 was a benefit of 154%. The effective tax rate for the nine month ended February 25, 2018 was lower than the statutory federal income tax rate of 29%, primarily due to the TCJA, which included a revaluation of ending deferred tax asset balance to 21%. As of February 24, 2019 and May 27, 2018, the Company had unrecognized tax benefits of $618,000 and $479,000, respectively. Included in the balance of unrecognized tax benefits as of February 24, 2019 and May 27, 2018 was $538,000 and $372,000, respectively, of tax benefits that, if recognized, would result in an adjustment to the Company’s effective tax rate. The Company does not expect its unrecognized tax benefits to change significantly within the next twelve months. The Company has elected to classify interest and penalties related to uncertain tax positions as a component of its provision for income taxes. The Company has accrued an insignificant amount of interest and penalties relating to the income tax on the unrecognized tax benefits as of February 24, 2019 and May 27, 2018. Due to tax attribute carryforwards, the Company is subject to examination for tax years 2015 forward for U.S. tax purposes. The Company is also subject to examination in various state jurisdictions for tax years 2012 forward, none of which were individually material.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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